Wednesday, December 14, 2011

Into the gap

Well well, barely a notable gap at the open, would you believe it?

After a short morning run, price hit a brick wall, in the form of yesterday's close. From there on we lost about 1% on the S&P before the market started bottoming. A nice bounce followed, but price couldn't pass the morning range (which matched yesterday's lows) and back down we went.

Going back towards the low of the day took clearly less time than the bounce up. Back at the lows, which held, buying came in with good volume. Actually, the midday low was slightly undercut and next, price shot up about 0.5% in less than 5 minutes. But no follow-through, we kept trading in the upper half of that big candle.

5m-chart SPY is depicted in the trade section.

Daily charts, DIA, SPY, QQQ and IWM. We see that all indices are now trading in the gap formed two weeks ago. Tech is lagging and already filled it's gap. Let's see if a bounce will follow.

Metals sold off huge, from 3.5% to almost 6% for gold, copper and silver.
Also a big dive for oil (-5%), so yesterday was a fake move higher (thanks to the Iran rumors).
The euro also travelled south, now under the 1.30-level!

I did some bottom-fishing on the SPY, all were small positions. See chart hereunder, point 1 were two losing trades (long on the hammers), point 2 for the only winner of the day.
Trade 1: long 121.86, out 121.66
Trade 2: long 121.77, out 121.62
Trade 3: long 121.70, out 1/4 @122.10, 1/4 @122.36 (just missed another 1/4-exit @122.60) and the remaining shares @122.32

5m-chart SPY:

And to end the day: an interesting article about entries: All In or Scale In

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